Prudential PLC on Wednesday raised its half-year dividend by nearly 10%, despite a two-thirds fall in profit, as adjusted profit rose and the Asia-focused insurer and asset manager said it is on track to achieve its five-year growth plan.
London-based Prudential reported $394 million in IFRS attributable pretax profit in the first half of 2024, down 66% from $1.18 billion a year before. The sharp fall in profit was due to negative ‘short-term fluctuations’ in investment returns of $1.08 billion, compared to negative $287 million a year before.
Adjusted operating profit was $1.54 billion, up 5.6% from $1.46 billion.
Insurance business profit was $1.69 billion, up 3.3% from $1.64 billion. It was up 6% at constant currency. Within the insurance business, profit was up 20% in mainland China, up 27% in Singapore, and up 21% in Indonesia, all at actual currency rates. However, it was down 9% in Hong Kong and 8% in Malaysia on the same basis.
‘Our resilient performance in the first half of 2024 was achieved having taken steps to reposition our business in the Chinese mainland ahead of both regulatory and macro-economic changes,’ Prudential said. ‘We also took decisive action on medical repricing in Indonesia and Malaysia in advance of the market. Other markets such as Singapore, India and Taiwan have performed well given our continued product innovation and expansion of distribution capabilities.’
Asset management profit rose by 6.2% to $155 million in the first half of 2024 from $146 million a year before.
New business profit was down 1.4% to $1.47 billion from $1.49 billion, but up 1% at constant currency. Prudential said growth in new business profit was 8% at constant currency when excluding ‘the effect of interest rate and other economic impacts’.
Prudential said it saw a pick-up in sales momentum in June, which has continued into the second half of the year. It expects new business profit to grow in all of 2024 in line with its objective for 2022-27 of a 15% to 20% compound annual growth rate.
‘We entered this year with a clear strategy and a set of outcomes we are confident in achieving by 2027,’ commented Chief Executive Officer Anil Wadhwani.
Prudential declared a first interim dividend of 6.84 cents, up 9.3% from 6.26 cents a year before. The company also noted that it has bought back 22 million shares for $192 million in total since the launch of the first tranche of its $2 billion share buyback.
Prudential shares were up 1.6% to 673.10 pence early Wednesday in London, outperforming the wider FTSE 100 index, which was marginally lower. The stock closed down 2.2% to HK$68.15 in Hong Kong.
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